3. You are considering buying a painting by a local artist for $700. You believe that this artist is just about to be discovered, and think that 20 years from now the painting will be worth $25,000. If you are correct, what average annual return would you earn on this investment over this period?

4. What is the present value of a $2,000 perpetuity under each of the following growth assumptions? Assume your discount rate is 9.4%. a) No growth b) 3.0% growth c) 6.0% growth